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Robert Wagner

 
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  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    Thanks OLPDS, my understanding is that SYNM asked TSN twice in 2013 to restart the plant and both time they were refused. TSN used the excuse that they wanted to wait until SYNM decided what they wanted to do about the sale. I'm pretty sure that was said in a recent conference call. From the people I've talked to the SYNM/TSN relationship was simply dysfunctional and toxic, and I truly hope REGI can smooth things out. As you pointed out, they burned through all the tax credit with the plant being idle. TSN has huge resources, if they wanted the plant started they would have started it. They could have simply donated the feedstock to get it running if they really wanted the plant to be running. They have warrants on SYNM and I'm sure a running plant would have brought a better price for SYNM than a shuttered one.

    The problem as I understand it is that it will cost $20 million minimum to get the plant restated, $10 mill from SYNM. The plant doesn't have a great track record so this last restart would have been a last chance for SYNM. If a problem developed they wouldn't be able to continue on without further funding. That would mean another stock offering or going into debt.

    I'm as frustrated as everyone one else that holds SYNM, and really would have liked to see them get this plant up and running. The cash flow potential is enormous, especially if another blend wall issue develops.

    That being said, I'm worried that people will vote against the buyout, and then I think we are in real trouble. SYNM simply doesn't have the cash IMHO to continue on much longer. REGI has the resources to bring the SYNM promise to life, and I'm afraid that is the best we can hope for. But I'm with you, it has been a huge disappointment. I have a CPA friend that always warns against 50/50 agreements, and SYNM is a great case study as to that belief. Someone had to own it, and teaming up a microcap with a megacap is a death sentence if the megacap doesn't play ball. They can simply outlast the microcap in any disagreement.
    Mar 13 03:47 PM | 2 Likes Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    "If the market had its say almost no alternative fuels would survive that which can be provided by oil distillates. "

    Yep, that is why politics is so important to this industry.
    Mar 13 12:35 PM | 1 Like Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    "By announcing the deal with REGI, I feel that they were able to cover up the fact that they didn't have the ability to operate Dynamic Fuels. SYNM management strung shareholders along until the price fell out. Then, they announced that the deal was for fractional shares of REGI; equal to not even half of what SYNM was valued at when the deal was first announced! "

    I totally disagree, read the proxy statement. Another buyer strung them along, then backed out. SYNM has simply run out of cash, that has and always was their Achilles heal. You should be upset at those who prevented them from restarting, not SYNM. IMHO REGI will be able to provide SYNM shareholders with the resources that will allow SYNM's technology to be fully realized. SYNM is much stronger as part of a diversified energy company than as a stand alone.
    Mar 13 12:04 PM | 4 Likes Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    "Thorough in hiss examination of a few parts of the story but utterly simplistic. The heart of the bio-diesel manufacturing process is very simple and the industry is largely devoid of barriers to entry."

    There are huge barriers to entry. Sure the technology, but the economics aren't. There may be no obstacles to entering this industry, but to produce at a profitable level you have to be able to compete with well capitalized firms like REGI that have all the advantages. REGI and its technologies, economies of scale and broad foot print are huge barriers to entry. Tell a firm that REGI has bought out that there are no barriers to entry into the BD industry. The efficient commodities markets are a huge barrier to themselves. REGI can lower the cost of its production well below a smaller firm that must rely on soy bean oil. That barrier to entry is the most important one of all.
    Mar 13 10:58 AM | 7 Likes Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    "Doesn't your optimistic viewpoint assume that oil prices remain relatively constant for the next several years? "

    The RIN design, and the additional tax credit pretty much make the price of oil irrelevant. Ethanol used to be much more expensive than gas, and now it is competitive on its own, but to get there the industry had to be built during the unprofitable time. The RINs do that, they are intended to guarantee a profit. If oil falls, the RINs increase. The big threat is that congress stops the RFS2. If that happens, virgin oil biodiesel is dead. It isn't even close to being profitable. Firms like REGI can use waste oils like yellow grease that only competes as an animal food and a few other uses. Before the RFS2 existed yellow grease was a waste product and sold for less than $0.10/lb, which today would make it a very profitable feedstock without regulations. Bottom line, id BD is the highest and best use for yellow grease, its price would fall to keep REGI alive, while other BD firms that rely on soybean oil are certain to die.
    Mar 13 10:50 AM | 2 Likes Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    I think people are missing the point here. The reason for the cheap valuation is because of the loss of the tax credit sending the margins into the tank and oversupply from Q4 2013. 1) The tax credit has always been reinstated in the past, so earnings are effectively/most likely deferred, not lost 2) If RINs work as intended they will fully adjust for the loss of the tax credit 3) The EPA will likely have to boost the RVO, either because of a lawsuit, or because they want to compensate for cutting the ethanol RVO 4) Both the tax credit and RVO issues are discounted in the PPS, yet both have IMHO a greater than 50/50 chance of being resolved in favor of REGI 5) As stated in the long-term REGI benefits from the loss of the tax credit because it weakens the competition ie SYNM 6) REGI is doing all the things necessary to transition from a BD firm to an alternative energy and chemicals firm 7) SYNM's plant should boost REGI's average margin and add 37.5 million gallons to its capacity 8) SYNM also have GTL, CTL and FT technology that would allow REGI to diversify out of just renewable fuels which is good considering elections can have catastrophic effects on this industry 9) If the EPA backs down on the ethanol RVO, you can bet on another blendwall issue and RINs and margins exploding.
    Mar 13 10:45 AM | 6 Likes Like |Link to Comment
  • Renewable Energy Group, Inc.: A Textbook Dollar Bill For Fifty Cents, Maybe Less [View article]
    Very well written and thorough article. I write a lot about REGI but are usually more single topic issues. I'm sure I'll be linking to this article in the future for people that need more background on the company and other details. Additionally, while this is an extremely bullish article, the author avoided what I consider REGI's greatest potential, that being going after the cellulosic RINs. That industry doesn't even really exist, but it makes up the vast majority of the RFS2 going forward. The recent acquisitions by REGI will allow then to pursue cellulosic RINs. Also thanks for providing confirmation to my belief that the BTC was a redundant subsidy and more a nuisance than a benefit, especially for REGI. Reading your article made me think REGI may start looking at KiOR as a possible purchase, and would further open the door to cellulosic. Lastly, part of the reason the D6 RINs, and in turn D4 RINs are so high is that there wasn't an oversupply produced in 2013. The RVO was basically bet, as opposed to reaching the allowed 120%. What that has done in create a shortage of 2013 D6 RINs because obligated parties are trying to bring some 2013 D6 RINs into 2014 as insurance against a possible "blend wall." Also, while the RVO for 2014 did increase from 2013 for biodiesel, it is still below the 2013 level. My understanding is 1.7 billion gallons in the value to watch for with the final EPA RVO for biodiesel. Once again, thanks a million for writing such an outstanding article. Keep up the great work.
    Mar 13 08:58 AM | 9 Likes Like |Link to Comment
  • Higher Soybean Prices Are Helping Renewable Energy Group's Margins [View article]
    "So if anything it will make American biodiesel imports more attractive"

    I think the article said the EU already has a tariff against US BD.
    Mar 11 01:12 PM | Likes Like |Link to Comment
  • Higher Soybean Prices Are Helping Renewable Energy Group's Margins [View article]
    The European Union imposed five-year tariffs on biodiesel from Argentina and Indonesia, expanding renewable-energy trade barriers after similar EU import levies against the U.S.
    http://bloom.bg/1lSDjKy

    1) That could be good news. The US may impose similar tariffs if they switch their dumping towards the US.
    2) D4 RIN prices haven't been impacted...yet.
    3) If the US is going to allow imports, they should dramatically boost the BD RVO.
    4) The cry will become louder for the tax credit reinstatement.
    Mar 11 01:01 PM | Likes Like |Link to Comment
  • Higher Soybean Prices Are Helping Renewable Energy Group's Margins [View article]
    "All I see in the news today is something about Argentinian biodiesel exports being hit by Eurozone tarriffs. ?? "

    That is bad news. I can't for the life of me figure out why imports are allowed when the purpose of the RFS2 is to develop a domestic industry. I just don't get it. I did see the Senate's bill addresses that flaw in the EPA's system.
    Mar 11 12:54 PM | Likes Like |Link to Comment
  • Renewable Energy Group Beat Expectations... As Expected [View article]
    TMIR, it is pretty clear:
    (B) Syntroleum’s stockholders do not approve the asset sale,
    Mar 11 10:48 AM | Likes Like |Link to Comment
  • Higher Soybean Prices Are Helping Renewable Energy Group's Margins [View article]
    "Your article also shows that there is no need to implement any artificial biodiesel BTCs."

    If the system works as designed, that is correct. The problem is the markets anticipate the BTC being reinstated and the RINs fall in value. If they reinstate the BTC, it should be for multiple years or not at all. It is a redundant and disruptive policy.
    Mar 10 11:09 AM | Likes Like |Link to Comment
  • Higher Soybean Prices Are Helping Renewable Energy Group's Margins [View article]
    " I know that you have been long calls for a while."
    1) I was counting on the earnings pop to hold.
    2) I am counting on another pop with the approval of the SYNM acquisition.
    3) I am counting on the RINs working as planned. RINs should head higher from here especially if soybean oil continues to rally.
    4) I am counting on the EPA making some statements about the RVO in favor of the BD industry.
    Mar 10 09:06 AM | Likes Like |Link to Comment
  • Renewable Energy Group Beat Expectations... As Expected [View article]
    TMIR, I'm not sure that is accurate:

    if (i) the asset purchase agreement is terminated b
    ecause (A) the asset sale was not consummated by th
    e date 150 days following the
    date on which the registration statement on Form S-
    4 is first filed with the SEC, (B) Syntroleum’s sto
    ckholders do not approve the
    asset sale, or (C) Syntroleum breaches its represen
    tations and warranties under the asset purchase agr
    eement or fails to perform its
    obligations under the asset purchase agreement, (ii
    ) a third-party acquisition proposal is publicly an
    nounced before the stockholder
    vote on the asset sale and (iii) Syntroleum enters
    into an agreement for or consummates an acquisition
    proposal within 12 months of
    such termination
    http://bit.ly/1hKqwWH
    Mar 4 08:29 PM | 1 Like Like |Link to Comment
  • Renewable Energy Group Beat Expectations... As Expected [View article]
    RINs would rally on that news. That is what we are hoping for.
    Feb 28 02:47 PM | 1 Like Like |Link to Comment
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